Politicians need to take charge of the economy and borrow to see a return on investment
, I advocated a radical way of using exceptionally low borrowing rates to stimulate growth in the economy and, in particular, in major infrastructure works.
I claim no credit whatsoever that the following week the chancellor came up with a programme to fund a scheme to offer a loan guarantee to the banks for a scheme that commenced on 1 August. Unfortunately, there was no clear mechanism for ensuring that such a guarantee would result in banks lending to business.
We have now also seen the second quarter GDP results for 2012, demonstrating three consecutive quarters of negative growth. Indeed, the UK economy is now about 4.5% smaller than it was before the recession, which makes it by far the worst four-year period for the UK, outside wartime, in at least 100 years. Construction was particularly hard hit with initial results projecting a staggering 3.9% drop in the last quarter, making output nearly 10% smaller than a year ago.
The UK economy is now about 4.5% smaller than it was before the recession, which makes it by far the worst four-year period for the UK, outside wartime, in at least 100 years
This time the International Monetary Fund has joined in to provide a warning that we might be going off the rails. Even diehard government supporters have been calling for an acceleration of spending on school building and defence projects. Others pin their hopes on larger infrastructure works. Still some wrongly talk about the 鈥渓argest ever announcement of investment in rail since the Victorian era鈥�. Wrongly, because much of the an